Panasonic Is Likely to Post Loss, Close Plants

Panasonic is likely to report an annual net loss of about 100 billion yen ($1.1 billion) on restructuring charges, weak demand for consumer electronics and the effects of the strong yen, a newspaper said.

It would be the first net loss in six years for the company, formerly known as Matsushita Electric Industrial. 

Panasonic also plans to close three plants, including two of its three plants that make electronics parts in Malaysia, the Nikkei business daily said without citing sources. The third plant to be closed is in the Philippines, the Nikkei said.

Panasonic spokesman Kunio Ichikawa declined to comment on the report, saying the company will announce its quarterly results on Feb. 4, which may or may not include a revision to its earnings outlook.

Panasonic had forecast a 10 percent rise in net profit to 310 billion yen at the start of the fiscal year on April 1 after a record profit of 280 billion yen a year earlier.

It lowered its projection to a profit of 30 billion yen in November as the global economic downturn accelerated.

Analysts on average expected a loss of 2.7 billion yen in a poll of 15 brokerages by Reuters Estimates prior to the Nikkei report.

Panasonic's operating profit is also likely to suffer a worse fall than the 35 percent drop to 340 billion yen the company forecast in November, the Nikkei said.

This would reflect falling demand for semiconductors and electronics parts and worsening margins on the flat-panel TVs that have driven earnings in recent years, it said.

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One of the factories to be closed in Malaysia makes film capacitors used in mobile phones. The operation, in Malacca, will be shuttered in March, the Nikkei said.

A plant in the state of Selangor, which makes switches for audiovisual equipment, will be closed in September, it said.

The third plant to be closed is a Philippine facility that produces 12 million manganese dry-cell batteries a year for the local market.

Panasonic said earlier this month it would cut its investment in two new flat-screen TV plants by about $1.5 billion and exit unprofitable businesses as the global economic slump slices into its profits.

Evaporating demand for flat TVs, digital cameras and other electronics products has forced rival Sony to forecast a record annual operating loss and Samsung Electronics to book its first-ever quarterly loss.

Copyright 2009 Reuters. Click for restrictions.